STATE OF NEW YORK ________________________________________________________________________ 5136 2023-2024 Regular Sessions IN SENATE February 23, 2023 ___________ Introduced by Sen. RIVERA -- read twice and ordered printed, and when printed to be committed to the Committee on Health AN ACT to amend the social services law and the public health law, in relation to pharmacy services provided by managed care providers and to repeal sections 1 and 1-a of part FFF of chapter 56 of the laws of 2020 relating to directing the department of health to remove the pharmacy benefit from the managed care benefit package and to provide the pharmacy benefit under the fee for service program, in relation thereto The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Sections 1 and 1-a of part FFF of chapter 56 of the laws of 2 2020 relating to directing the department of health to remove the phar- 3 macy benefit from the managed care benefit package and to provide the 4 pharmacy benefit under the fee for service program, are REPEALED. 5 § 2. Subdivision 4 of section 364-j of the social services law is 6 amended by adding four new paragraphs (x), (y), (z) and (aa) to read as 7 follows: 8 (x) Notwithstanding any provision of law to the contrary, managed care 9 providers under the medical assistance program and any pharmacy benefit 10 managers acting on their behalf, as defined in section two hundred 11 eighty-a of the public health law, shall be required to reimburse retail 12 pharmacies for each outpatient drug, at the National Average Drug Acqui- 13 sition Cost (NADAC), or if NADAC pricing is unavailable for a drug, 14 reimbursement shall be pursuant to the current benchmarks under fee-for- 15 service, plus a tiered professional dispensing fee based on prescription 16 claims volume to be determined by the commissioner. In determining a 17 professional dispensing fee, the commissioner shall issue a survey that 18 collects claims volumes from enrolled pharmacies, and other such infor- 19 mation as the commissioner may deem necessary to weigh regional vari- 20 ances and other factors significantly impacting markets from the previ- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD09373-03-3S. 5136 2 1 ous twelve-month period, to determine the appropriate dispensing fee 2 reimbursement. The dispensing fee determined by the commissioner shall 3 be in an amount of at least eight dollars and fifty cents. 4 (y) (i) Notwithstanding any provision of law to the contrary, a 5 managed care provider or pharmacy benefit manager acting on its behalf, 6 shall not deny any retail pharmacy the opportunity to participate in 7 another provider's pharmacy network under the medical assistance 8 program, provided that: 9 (A) such retail pharmacy agrees to the same reimbursement amount; 10 (B) is able to fill and dispense commonly dispensed prescriptions and 11 over-the-counter medications in a manner consistent with medical assist- 12 ance program guidance and statute for those patients and population the 13 pharmacy serves enrolled in the medical assistance program; 14 (ii) Nothing in this paragraph shall require a managed care provider 15 or pharmacy benefit manager to contract with a retail pharmacy or phar- 16 macies that fail to meet universally accepted professional standards of 17 pharmacy practice. Further, nothing in this paragraph shall be construed 18 as limiting the ability of managed care providers or pharmacy benefit 19 managers to remove pharmacies from their network, or to decline to 20 contract with pharmacies in cases of fraud, waste, abuse, or as other- 21 wise authorized by law. 22 (z) (i) A managed care provider or pharmacy benefit manager acting on 23 its behalf shall be required to reimburse 340B covered entity providers, 24 whether directly or through arrangements with their contractual pharma- 25 cies, for outpatient drugs dispensed under section 340B of the federal 26 public health service act (42 USCA § 256b), at NADAC, or if NADAC pric- 27 ing is unavailable for a drug, reimbursement shall be pursuant to the 28 current benchmarks under fee-for-service, plus a professional dispensing 29 fee as determined by the commissioner pursuant to paragraph (x) of this 30 subdivision. 31 (ii) Notwithstanding any provision of law to the contrary, rates of 32 payment between covered entities under section 340B of the public health 33 service act and contract pharmacies that obtain and dispense 340B drugs 34 on behalf of the covered entity, shall comprise a fee schedule, based on 35 fair market value principles and shall not be a percentage of either the 36 claim's total reimbursement or net margin. The commissioner shall evalu- 37 ate the adequacy of such fee schedule no less than every two years. 38 (aa) Notwithstanding any provision of law to the contrary, in order to 39 align managed care provider drug formularies to reduce complexity for 40 beneficiaries of medical assistance, and to maximize available federal 41 statutory drug rebates for the state, managed care providers and any 42 pharmacy benefit managers acting on their behalf, shall be required to 43 use the fee-for-service preferred drug list when developing a formulary 44 or preferred drug list of outpatients drugs for beneficiaries of medical 45 assistance. In the interests of the creation of a high quality uniform 46 formulary, and notwithstanding any provision of law to the contrary: the 47 commissioner shall convene a committee comprised of the pharmacy direc- 48 tors of the state's currently participating managed care providers to 49 advise in the creation and stewardship of any such formulary or 50 preferred drug list. 51 § 3. Section 280-a of the public health law is amended by adding a new 52 subdivision 6 to read as follows: 53 6. Medical assistance delivery option. Notwithstanding any provision 54 of law to the contrary, no pharmacy benefit manager shall limit the 55 option for an individual exercising their benefits under the state's 56 medical assistance program receiving prescription or over-the-counterS. 5136 3 1 medications to receive such medications from their local, non-mail order 2 pharmacy of choice via delivery including in-person delivery, United 3 States postal service or other mail or courier service. No restrictions, 4 prohibitions, or prior authorization requirements shall be based on the 5 individual's choice in delivery type or distance from a pharmacy. 6 § 4. This act shall take effect immediately; provided, however, that 7 sections two and three of this act shall be deemed to have been in full 8 force and effect on and after April 1, 2023.